Monday, October 31, 2016

5 CO-OPS INTO ISLAMIC FINANCE





5 Minda coops' assets 

hike from P1M to P10M

Thursday, October 27, 2016
TOTAL assets of five Mindanao cooperatives integrating Shari’ah or Islamic Financing ballooned from P1 million to about P10 million barely after two years.
Datu Mussolini Sinsuat Lidasan, executive director of Al Qalam Institute for Islamic Identities and Dialogue in Southeast Asia of Ateneo de Davao University (ADDU), told SunStar Davao in an interview Wednesday, October 26, at the sidelines of the Basic Training on Islamic Economics at the Community Center, ADDU that it is but a reflection of the huge economic opportunities of Islamic financing.



He said in partnership with Peace and Equity Foundation they supported five cooperatives in the island-region namely Kadtabanga Peace and Development Advocates, Katiakap, Bangsamoro Women Federation, Al wataniya and Tasbikka.



“We are interested in Islamic Financing because this is a tool for poverty alleviation,” he said, adding that since 2011 Ateneo, through Al Qalam, started research on Sharia’ah economics of Islamic finance.



Islamic Micro Finance is one of the current projects of Al Qalam Institute. Lidasan said that they target to expand their network from five Mindanao Cooperatives to 100 in three to five years.
Shari’ah financing expert Chairiawaty Hendar of Universitas Islam Badung in Indonesia (ADDU’s partner in the training), in a separate interview, said they are bringing in Indonesia’s model of the Islamic Financing to the Philippines.
Islamic Financing is touted as a growing "$2 trillion" global industry.



Islamic Roadmap

Last year, the Peace and Equity Foundation (PEF) in partnership with Al Qalam Institute, Cordaid and World Bank (WB) Philippines created the 21-year roadmap to attain compliance to Sharia'h-based financing industry.



The roadmap implementation started this year.
The roadmap, which is divided into three stages with seven years each of realization, is patterned after the Southeast Asian countries like Indonesia, one of the leading countries in adopting Islamic Finance in the global scale.
Ricardo Torres, PEF's Partnerships and Program manager, said in an earlier report that the first seven years will focus on information drive, increasing the public awareness and capacity building of stakeholders on Islamic Financing in the country.
“We really have to invest on people because not all are comprehensively aware, we also have to build institutions and leaders, among others. We aim that by 2020 we will address the scarcity of experts on Islamic banking,” Torres said.
For the second phase of the roadmap, a political infrastructure such as crafting a law to institutionalize the practice on Shari’ah economics will be the focus target.
“We are eyeing on Anak Mindanao Representative Sittie Ojallia Turabin Hataman and Senator Bam Aquino to sponsor the bill,” Lidasan said.
He said that the roadmap implementation is moving smoothly, even the budget allocation raised from P1.2 million annually to some P3.5 million.
By the last phase of the 21-year roadmap, the industry players hope that Islamic Financing will already be integrated in the government system.
Torres added that PEF, with its target 30 partner organizations, will invest a total of P600 million in investments in Islamic Financing by the end of 2020, P100 million of which will be sourced from PEF itself.
These partner organizations are eyed to be offering different Islamic Financing products such as microfinance, insurance, and loans.
Some of the industry’s challenges include limited Islamic banking experience in the Philippines, absence of regulatory infrastructure on Islamic Banking, lack or scarcity of experts on Islamic banking/finance, very low investor awareness and acceptance of Islamic banking, and limited Halal investment products in the Philippines.
In the Philippines, Al Amanah Islamic Investment Bank in the Philippines, a subsidiary of the Development Bank of the Philippines (DBP), is the only bank in the country authorized to offer Islamic banking.
Market Response
Asked on how the market responded on their series of campaigns nationwide to introduce the Shari’ah economics, Lidasan said for those who are in social development, most agree to the concept of social justice by uplifting the poor and the marginalized.
For non-Islams, who have no idea at all, they were hesitant at first but those who are knowledgeable on economic principles, conventional banking and data on the rise of the portfolio of Islamic Financing they got interested.
During Asia economic crisis sometime in 2008, Lidasan shared that only the institutions integrating Islamic Financing were stable.
In their training workshop last week in Makati, Lidasan said, the Philippine Stock Exchange has a total of 55 registered Shari’ah compliant companies.
Meanwhile, a total of 35 participants attended the Basic Training on Islamic Economics. It opened last October 26 and will run until October 29.
“The purpose of this training workshop is to enhance and strengthen the participants' knowledge about Islamic Business Management and Enterprises that is very relevant to Islamic Micro Finance,” Lidasan said.
Asked on how it can alleviate poverty, Lidasan was quick to add that putting interest rates is prohibited.
“It is not like the “5-6” or conventional banking wherein people end up paying the interest instead of having economic empowerment. Here (Islamic Financing), we have different models which are more on profit sharing, profit and loss sharing and benevolent loans,” he said.
But he clarified that before they allow the people to borrow money, they will undergo training to empower the people in proper bookkeeping and business attitude, among others.

Reposted from Sun Star Davao.
 
 

No comments:

Related Posts with Thumbnails